Last Friday, after negotiations between the Department of Defense (DOD) and frontier AI lab Anthropic broke down, Secretary of Defense Pete Hegseth declared the company a "supply chain risk." The impasse came after Anthropic insisted on contractual language barring its AI models from domestic mass surveillance and fully autonomous weapons systems and the DOD would only accept restrictions to "all lawful use." This is the confrontation between governments and AI labs that safety experts have spent years warning about and has forced an urgent public reckoning over government use of AI for surveillance and warfare. The designation of Anthropic as a “supply chain risk” is legally dubious on its own and came paired with a likely illegal demand: that "no contractor, supplier, or partner that does business with the United States military may conduct any commercial activity with Anthropic." If that order survives court challenge, it would effectively end Anthropic as a company. Hear from leading experts on AI and defense what comes next and why Congress must act.